Sharon D'Ercole died after she was hit at the intersection in Dianella.

AAP: Cortlan Bennett

The illness of a "principal" witness has led prosecutors in Perth to drop the case against a man accused of sparking a police chase that ended with the death of a 50-year-old woman.

James Stuart Edmonds had been due to stand trial in the District Court accused of stealing a car and driving it recklessly in Dianella in April 2012.

Police chased the stolen vehicle and went through a red light slamming into a car being driven by Sharon D'Ercole.

She died and her 16-year-old daughter was was seriously injured.

The police officer driving the pursuit vehicle was last year found not guilty by a jury of a charge of dangerous driving causing death.

He later resigned from WA Police.

Edmonds had been due to stand trial in February but the District Court was told the main witness was ill and unable to testify.

The trial was rescheduled for this month, but in May prosecutors officially discontinued the case.

In a statement, the Office of the Director of Public Prosecutions said, "the charges against Mr Edmonds have been discontinued by the state because the principal witness is not in a position to give evidence now or at any time in the foreseeable future due to ill health".

It continued: "The state has elected to discontinue all charges against Mr Edmonds, rather than proceed on any lesser charge(s), as proceeding on lesser charge(s) would require a distortion of the facts and create an artificial basis for sentencing.

"By discontinuing the charges against Mr Edmonds at present, the State's position is protected in the unlikely event that the witness returns to good health and the prosecution can be reinstituted."

Terry Dobson, representing the D'Ercole family, said Sharon's husband, Ron, found it frustrating that no one would be held criminally responsible for her death.

"I find it absolutely extraordinary that a lady minding her own business can drive through a green light and get cleaned up by another vehicle going through a red light and no one is held accountable for it," he said.

Edmonds is currently in jail having been sentenced in December 2012 to more than four years' imprisonment for a string of offences, including setting fire to the stolen car to try and cover up his involvement in the crash.